Alex Mashinsky faces a ‘death-in-prison sentence’ for Celsius collapse

Alex Mashinsky, the former CEO and co-founder of defunct crypto lender Celsius Network, is pushing back against what he calls a “venom-laced” attempt by federal prosecutors to secure a de facto life sentence. In a May 5 reply to the memorandum from the US Justice Department, the defendant is asking the court to grant him a sentencing of no more than 366 days.

According to the memo, the United States Department of Justice is requesting a 20-year prison term ahead of Mashinsky’s sentencing, scheduled for May 8 in a New York district court.

The 59-year-old crypto executive pleaded guilty in December 2024 to commodities fraud and market manipulation charges, admitting he earned $48 million by selling CEL tokens before Celsius collapsed in June 2022. Federal prosecutors say Mashinsky’s actions were not mistakes but deliberate choices to deceive investors and steal from them.

Prosecutors seek harsh penalty, Mashinsky disagrees

The DOJ’s sentencing memorandum, filed April 28, accuses Mashinsky of orchestrating a fraudulent scheme that left thousands of investors financially devastated. In their filing, prosecutors stated his guilty plea meant he “deliberately targeted real, ‘everyday’ people” and “destroyed lives” through his actions. 

As reported by Cryptopolitan, the plaintiffs’ representation listed hundreds of victim statements collected days earlier, on April 23, that recount how individuals placed their trust, and in many cases, their life savings, into Celsius after Mashinsky assured them the platform was safe. 

Federal attorneys argue that Mashinsky’s misconduct was intentional and sustained, coining it a predatory campaign rooted in greed. 

Mashinsky’s legal team, in response to the memo, has rebuked the prosecution’s request. They contend that the recommended sentence amounts to a “death-in-prison” punishment for a first-time, non-violent offender. 

Instead, they pleaded with the court to impose no more than a year, claiming Mashinsky’s 30-year business history and his personal background were enough reason to see the defendant was “clean.”

“The government’s submission disregards that Alex is a real-life person with complexities, subtleties and nuances, and instead takes a black-and-white, blunt and reductive approach to describe his conduct in savage and primal terms usually reserved for the most violent criminals,” the lawyers propounded.

They also mentioned his family’s persecution as Soviet Jewish refuseniks, his military service in the Israeli Defense Forces, and his entrepreneurial track record in heavily regulated industries prior to founding Celsius.

The defense’s filing contends that prosecutors created a distorted caricature of Mashinsky by relying heavily on hearsay and internal communications from other Celsius employees. 

According to the defense, 72 exhibits used in the DOJ’s submission include Slack messages from staff who had no insight Mashinsky’s decisions or knowledge. The lawyers said that prosecutors ignored statements by employees that “contradicted their guilty narrative.”

Alex plea deal and personal toll

Mashinsky’s guilty plea came nearly a year after federal prosecutors filed seven charges against him in July 2023. As part of the plea agreement, he admitted to manipulating CEL’s market price and committing commodities fraud.

In the May 5 filing, Mashinsky’s lawyers stress that their client has abided by all terms of the agreement. They argue he has not denied responsibility and has not acted inconsistently with the terms of his plea.

“Alex will appear before this Court on May 8th chastened and humbled,” the memorandum states. His attorneys reiterated his remorse, saying he has read every victim’s letter and is “tortured every day” by the pain he caused. 

“The document portrays a man devastated by guilt, ashamed of his misdeeds, and eager to spend the rest of his life making amends,” the filing stated.

The defense also claims Mashinsky has been made the face of Celsius’ collapse far beyond his actual role. “Alex is inserted as the scapegoat for every corporate action, every group decision, every unanimous vote,” his lawyers wrote.

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